Bullish on Baghdad The Iraqi economy shows signs of strength.
BY ROBERT T. MCLEAN
Tuesday, April 11, 2006 12:01 a.m. EDT
A key to success in Iraq will be the ability of the Iraqi people and coalition members to transform the country's economy from a state of ruin to a model for prosperity in the Middle East. Iraqis with jobs and opportunities are less likely to join or sympathize with terrorist and insurgent efforts, focusing more of their energies on improving their individual situation than on political developments that could be interpreted as a danger to their sect. This outcome parallels one of the Bush administration's original goals of the invasion in establishing a bridgehead for reform in the Middle East, while reducing the potential of a drawn out and costly American presence in Iraq. Thus, while the vast majority of attention has been placed on the political violence plaguing Iraq, the economic development of the country deserves additional scrutiny and provides reason for guarded optimism.
As the Iraq campaign continues to be labeled a disaster by political opponents of the Bush administration at home, by those suspicious of the United States abroad, and increasingly by conservatives who call themselves realists yet have no realistic plan for Iraq, positive indicators about the Iraqi economy are not too hard to find. Though the economy expanded by an unimpressive 2.6% in real terms in 2005, that figure is scheduled to reach over 10% this year, as reported by the International Monetary Fund. Dawn Liberi, director of the U.S. Agency for International Development in Iraq, noted in February that per capita income has increased from $500 at the time of the invasion in 2003 to $1,500 today.
Despite the charge by Anthony Cordesman of the Center for Strategic and International Studies that American efforts to improve the devastated Iraqi economy "have largely been a wasteful, and highly ideological and bureaucratic failure," more than 30,000 new businesses have been registered with USAID in the past seven months alone. While the bureaucracy undoubtedly has been responsible for waste and inefficiency--not something uncommon with these types of establishments--ideological efforts to introduce conservative principles into the Iraqi economy seem as little cause for alarm.
(more)
http://www.opinionjournal.com/federation/feature/?id=110008212